HUMBL, Inc. (HMBL)

Executive Summary / Key Takeaways

• Profound Strategic Pivot: HUMBL, Inc. (HMBL) has undergone a complete transformation, divesting its legacy Web3 and fintech operations to become a holding company focused on high-value joint ventures and acquisitions, primarily in Brazil and Latin America.
• New Asset Base and Leadership: The company's core assets now include 41,500 tons of magnesium silicate through its 99% owned FinCapital subsidiary and a 51% interest in Multicortex, an AI and high-performance computing joint venture. This shift is spearheaded by new controlling shareholder Ybyrá Capital S.A. and CEO Thiago Moura.
• Financial Transition Underway: While continuing operations currently report no revenue, the company significantly improved its working capital deficit to $6.59 million as of March 31, 2025, from $23.69 million previously, bolstered by asset sale proceeds and liability reductions.
• High-Risk, High-Reward Outlook: HMBL faces substantial doubt about its ability to continue as a going concern, with future success contingent on monetizing its mineral assets and effectively executing its new acquisition-driven strategy in unfamiliar markets.
• Competitive Re-evaluation: HMBL's competitive landscape has fundamentally changed from fintech to a diversified portfolio spanning mining/commodities and AI, where its new competitive edge lies in Ybyrá Capital's regional expertise and network.

The Phoenix Rises: HMBL's Strategic Metamorphosis

HUMBL, Inc. (HMBL) is a company in the midst of a profound transformation, shedding its past identity as a Web3 and fintech platform to embrace a new future as a strategic holding company. This radical pivot, initiated in late 2024, marks a decisive shift towards high-value joint ventures, mergers, and acquisitions, with a particular focus on the burgeoning markets of Brazil and Latin America. This strategic reorientation is not merely an operational adjustment; it represents a fundamental re-imagining of HMBL's core business and its path to shareholder value.

The company's journey began in Oklahoma in 2009, later redomiciling to Delaware. A pivotal reverse merger in December 2020 brought HUMBL, LLC's operations under the corporate umbrella, initially focusing on digital wallets, marketplaces, and blockchain services. This period saw expansion through acquisitions like Monster Creative and BizSecure, alongside the establishment of a stock incentive plan. However, this era was also characterized by significant financial challenges, including substantial working capital deficits and accumulated losses, which consistently raised concerns about the company's going concern status. A notable divestiture occurred in February 2024, when the company sold its HUMBL Financial product line to Avrio Worldwide, PBC, receiving a 10% equity stake and a share of future revenues.

The true turning point arrived on December 2, 2024, with two simultaneous, transformative agreements. First, HMBL sold all its existing assets, including the HUMBL.com operations, to WSCG, Inc. for a total consideration of $20.00 million. This included $3.04 million in cash and debt cancellation, with a crucial $2.00 million cash payment received on April 1, 2025, and 24.56 million membership units of WSCG HoldCo, valued at $17.00 million, representing approximately 48.6% of WSCG's equity. Second, and concurrently, HMBL acquired a 99% equity interest in FinCapital Credito Pagamentos e Servicos LTDA, a Brazilian company, from Ybyrá Capital S.A. This acquisition was coupled with a change of control, as Brian Foote, the former CEO, sold his control shares to Ybyrá Capital S.A., establishing Ybyrá as the new controlling stockholder and ushering in Thiago Moura as the new Chief Executive Officer. This dual transaction effectively closed the chapter on HMBL's prior Web3 endeavors and opened a new one focused on tangible assets and regional market penetration.

The New Core: Minerals, AI, and Latin American Reach

Under its new leadership and strategic mandate, HMBL has adopted a holding company model, aiming to own and operate diverse subsidiaries. The cornerstone of this new strategy is FinCapital, whose primary asset is 41,500 tons of magnesium silicate, valued at $20.00 million, located in Minas Gerais, Brazil. Magnesium silicate is a versatile raw material with industrial applications in fertilizer, construction, ceramics, and fireproofing. HMBL's immediate plan is to market and sell this asset, with the expectation of entering profitable businesses upon its monetization. This represents a significant departure from its previous software-centric model, moving into the realm of raw materials and commodity trading.

Adding a technological dimension to its new portfolio, HMBL entered a joint venture with Multicortex, LLC on April 3, 2025, acquiring a 51% interest. Multicortex specializes in artificial intelligence (AI) and high-performance computing. While specific quantitative benefits of this technology are not yet detailed, the strategic intent is clear: HMBL will contribute 15% of any funds raised in a Regulation A offering, up to $3.00 million, to fund the development of Multicortex's product suite. This investment signals HMBL's intent to leverage cutting-edge AI for potential operational efficiencies, enhanced data analysis, or new product development within its diversified portfolio. The "so what" for investors is the potential for this AI venture to provide a technological edge, enabling smarter resource management or more efficient market penetration in its new sectors.

The overarching strategic initiative under CEO Thiago Moura, a principal of Ybyrá Capital, is to identify and acquire undervalued assets and businesses across North and South America, with a strong emphasis on Brazil. Ybyrá Capital's established regional presence and diversified interests in mining, real estate, and oil and gas are expected to create "two-way distribution pipelines throughout the U.S. and Latin America," offering strategic partners immediate access to these high-value markets. This approach aims to capitalize on Ybyrá's deep connections and expertise in the region, providing HMBL with a unique competitive advantage in sourcing and integrating new ventures.

Financial Performance: A Snapshot of Transition

The financial statements for the three months ended March 31, 2025, reflect a company in the early stages of this profound transition. Continuing operations reported no revenue, a stark contrast to the prior business model. The net loss from continuing operations before taxes was $(4.66) million, a significant shift from a net income of $800,772 in the comparable period of 2024. This change is largely attributable to the absence of a $2.80 million gain on the sale of HUMBL Financial assets recognized in Q1 2024, coupled with an increase in other expenses.

Operating expenses for Q1 2025 decreased by $152,443 to $1.38 million, down from $1.53 million in Q1 2024. This reduction was primarily driven by a $225,116 decrease in general and administrative expenses to $988,632, largely due to reduced payroll and related costs from fewer personnel. However, professional fees saw an increase to $391,861, primarily due to regulatory filing and compliance costs associated with the business transition. Management anticipates these professional fees will decrease as the company fully transitions out of its former operations.

A notable increase in "other expenses" to $3.28 million in Q1 2025, up from $2.33 million in Q1 2024, further impacted the net loss. These expenses include amortization of discounts, interest expense, and losses on the conversion of convertible notes and exchanges in warrants and Series C Preferred Stock, as well as a loss on an investee.

From a liquidity standpoint, HMBL showed improvement. The working capital deficit significantly narrowed to $6.59 million as of March 31, 2025, from $23.69 million at December 31, 2024. This improvement was a direct result of the investment in WSCG HoldCo, reductions in notes payable and accrued expenses, and the receipt of the remaining $2.00 million cash from the WSCG asset sale. Net cash used in operating activities also decreased by $509,464 to $298,235 for Q1 2025, compared to $807,699 in Q1 2024, reflecting a reduction in cash burn as the company streamlines its operations. Cash provided by financing activities was $377,000 in Q1 2025, primarily from convertible notes and related party notes. The company ended the period with $2.10 million in cash. The "so what" of these financials is that while HMBL is not yet generating revenue from its new ventures, it is actively managing its liabilities and improving its cash burn rate, indicating a focused effort on financial stabilization during this transitional phase.

Competitive Arena: A New Battleground

HMBL's strategic pivot has fundamentally reshaped its competitive landscape. The previous direct comparisons to fintech giants like Square (SQ), Coinbase Global (COIN), Robinhood Markets (HOOD), and PayPal Holdings (PYPL) are largely irrelevant to the company's new focus. While the old HMBL aimed to compete in digital payments and blockchain services, it consistently lagged these established players in scale, efficiency, and market share. For instance, Square's payment processing boasts approximately 99.9% uptime and handles millions of daily transactions, far exceeding HMBL's prior operational metrics, which were characterized by higher upfront costs and emerging tech integration. Similarly, Coinbase's crypto trading platforms offer 99.99% reliability and millisecond latency, dwarfing HMBL Financial's capabilities. The old HMBL's competitive disadvantages included significant dilution issues and a lack of profitability, which would have made sustained competition against these well-capitalized and efficient incumbents nearly impossible.

The new HMBL, as a holding company with interests in minerals and AI, now faces a different set of competitors. In the mining and commodities sector, its rivals are established mining companies and global commodity traders. HMBL's competitive edge here is its specific magnesium silicate asset and, more importantly, the deep industry connections and expertise of its new controlling shareholder, Ybyrá Capital. The "so what" for investors is that success will depend on HMBL's ability to effectively market and monetize this specific mineral, leveraging Ybyrá's network for favorable pricing and distribution, rather than technological superiority in extraction or processing.

In the AI and high-performance computing sector through its Multicortex JV, HMBL is entering a highly competitive field dominated by specialized AI firms and large technology companies with vast R&D budgets. HMBL's positioning is primarily as an investor and joint venture partner, not a direct technology developer. Its competitive advantage will stem from its ability to identify and fund promising AI ventures, and potentially integrate AI solutions to optimize operations within its other subsidiaries (e.g., in mining logistics or market analysis). The "so what" is about HMBL's strategic acumen in venture selection and its capacity to provide capital and market access to promising AI startups, rather than developing proprietary AI technology itself.

As a diversified holding company, HMBL competes with other investment firms and conglomerates, particularly those with a focus on Latin America. Its primary competitive advantage in this model is the strategic backing and regional expertise of Ybyrá Capital, which brings "deep connections in Brazil and throughout Latin America" and a track record in "mining, real estate, oil and gas." This network is crucial for sourcing and executing its strategy of acquiring "undervalued assets and businesses." HMBL's competitive disadvantages include its current lack of established revenue from its new segments, its reliance on external funding (such as the Regulation A offering for the Multicortex JV), and the significant "going concern" doubt that still shadows its financial viability. The unwinding of the NUBURU partnership also highlights potential challenges in maintaining strategic alliances.

Outlook and Risks: A Path Forward, Fraught with Challenges

HMBL's outlook is one of cautious optimism, heavily dependent on the successful execution of its new strategic direction. Management "anticipates entering into profitable businesses upon the sale of the magnesium silicate," signaling that the monetization of this core asset is paramount to generating initial cash flow and validating the new model. The broader plan involves a continuous search for and acquisition of "undervalued assets and businesses" across North and South America, leveraging the expertise and network of Ybyrá Capital. This strategy, if successful, could transform HMBL into a diversified holding company with a strong regional footprint.

However, significant risks loom large. Foremost among them is the "substantial doubt about the Company's ability to continue as a going concern," a critical disclosure that underscores the precariousness of its financial position despite recent improvements in working capital. The success of the new strategy hinges entirely on HMBL's ability to execute effectively in sectors where it has no prior operating history. Monetizing 41,500 tons of magnesium silicate requires navigating commodity markets, securing buyers, and potentially managing logistics, all of which present considerable execution risk. Similarly, the Multicortex AI joint venture, while strategically promising, is in its early stages and requires significant funding, with HMBL committing 15% of any Regulation A offering proceeds up to $3.00 million.

Furthermore, the company's history of significant share issuances for debt conversion and acquisitions raises concerns about potential future dilution for common stockholders. Ongoing legal proceedings, including a shareholder derivative class action lawsuit alleging federal securities law violations, continue to pose a reputational and financial risk, even with the recent dismissal of one case (though an amended complaint was filed). The recent unwinding of the NUBURU (NBURU) partnership also serves as a reminder of the inherent volatility and potential for shifts in strategic alliances. HMBL's future will be heavily influenced by its ability to secure consistent revenue streams from its new ventures, manage its debt, and attract further capital without excessive dilution, all while operating in competitive and sometimes volatile commodity and technology markets.

Conclusion

HMBL stands at a critical juncture, having executed a radical strategic pivot from its former Web3 and fintech aspirations to a new identity as a holding company focused on tangible assets and emerging technologies in Brazil and Latin America. This transformation, driven by the new controlling shareholder Ybyrá Capital and CEO Thiago Moura, represents a high-stakes bet on the monetization of its magnesium silicate reserves and the potential of its AI joint venture, Multicortex. The company's improved working capital and reduced cash burn in Q1 2025 signal a more disciplined financial approach during this transition.

The investment thesis for HMBL now rests on the successful execution of this new asset-backed, acquisition-driven strategy, leveraging Ybyrá Capital's deep regional expertise and network. While the competitive landscape has shifted dramatically, HMBL's ability to identify and integrate undervalued assets, particularly in the Brazilian market, will be key. However, the substantial doubt about its going concern status and the inherent execution risks in new sectors underscore the speculative nature of this investment. Investors must weigh the potential for significant upside from a successful pivot against the very real challenges of establishing new revenue streams and navigating complex markets, all while managing a legacy of financial strain.